The Turkish Lira suffered its worst one-day loss in a decade after President Donald Trump announced the United States would hike metals tariffs, losing about 20% of its value against the US dollar, prompting investor confidence to slump. Friday evening, the US issued a proclamation officially announcing the doubling of steel tariffs on Turkey, planned to go into effect Monday, according to international media reports.

Turkish market shares of the total Egyptian exports is about 5%, which is a very modest share, said Mohamed Abu Basha, head of macroeconomic analysis at the Cairo-based investment bank EFG-Hermes, noting that the Turkish Lira slump is a big issue, which Turkish authorities will find huge difficulties to deal with.

“The traditional solutions as interest rates’ hikes will not tackle this issue,” Abu Basha explained, saying that the tLira’s plummet has a very deep geopolitical dimension, which caused the Turkish currency to lose about 50% of its value in 2018.

Turkey is facing a deepening economic crisis, as the Lira fell sharply by about 22% in Friday’s early morning trading and the yields on government debt rose further, said a press statement by the Central Bank of Egypt (CBE) on Friday, adding that doubling the tariffs applied to Turkish aluminium and ssteel coincide with the Turkish delegation’s failure to reach a compromise with the US authorities.

The Turkish economic situation is very critical, as political issues pushed the economy to suffer several risks, which recently was shown in the Lira’s fall, mentioned Sherif El-Diwany, former head of the Middle East at the World Economic Forum in Geneva, adding, “Turkey now is an unstable market. Exit of funds from the Turkish financial markets can be an opportunity for the Egyptian economy as a competitive market in the same region.”

lMoreover, El-Diwany said that the Turkish market gets an advantage in the exportation markets, which both Egypt and Turkey export the same products for, explaining, “Egypt cannot well compete with Turkey in exporting textiles to the same markets, as the Lira is now down, hence prices will be lower than before.”